Back
$~
* IN THE HIGH COURT OF DELHI AT NEW DELHI Reserved on: 7th October, 2021 Date of decision: 27th October, 2021 + W.P.(C) 5713/2020 & CM APPLs. 20656/2020, 31384/2020 &
4153/2021 J K TYRE AND INDUSTRIES LTD. ..... Petitioner Through: Mr. Sidharth Luthra, Sr. Advocate with Ms. Alina Arora, Ms. Nimrah Sameen Alvi, Mr. Parth Singh, Mr. Sheezan Hashmi & Mr. Anmol Kheta, Advocates.
versus DIRECTORATE OF ENFORCEMENT ..... Respondent Through: Mr. Ravi Prakash, CGSC with Ms.
Shruti Shiv Kumar and Mr. Varun Agarwal, Advocates.
WITH + W.P.(C) 6499/2020 & CM APPL. 22801/2020 KP SANGHVI AND SONS LLP & ANR. ..... Petitioners Through: Mr. Susmit Pushkar, Mr. Gaurav Sharma and Ms. Bhavna Mishra, Advocates. (M:9644751674)
versus DIRECTORATE OF ENFORCEMENT ..... Respondent Through: Mr. Amit Mahajan, CGSC with Ms.
Ananya Khanna, Advocate.
(M:9717866618)
WITH + W.P.(C) 5855/2020 & CM APPL. 21152/2020 SHRI VISHWANATH OVERSEAS ..... Petitioner Through: Mr. Awanish Kumar, Advocate.
versus DIRECTORATE OF ENFORCEMENT ..... Respondent Through: Mr. Amit Mahajan, CGSC with Ms.
Ananya Khanna, Advocate.
WITH + W.P.(C) 2331/2021 & CM APPL. 6785/2021 PARAS IMPO EXPO PVT LTD ..... Petitioner Through: Mr. Varun Singh and Mr. Paras, Advocates.
versus DIRECTORATE OF ENFORCEMENT & ANR. ..... Respondents Through: Mr. Abhay Prakash Sahay, CGSC, Mr. Mannu Singh, Ms. Swayamprabha & Mr. Kunal Dhawan Advocates for R-
1.
Mr. Amit Mahajan, CGSC with Ms.
Ananya Khanna, Advocate WITH + W.P.(C) 4680/2021 & CM APPL. 14443/2021 ALOK INDUSTRIES LIMITED ..... Petitioner Through: Mr. Ritin Rai, Sr. Advocate with Ms.
Petrushka Dasgupta, Ms. Nasrin Shaikh and Mr. Vidit Mehra.
versus ASSISTANT DIRECTOR, ENFORCEMENT DIRECTORATE ..... Respondent Through: Mr. Amit Mahajan, CGSC with Ms.
Ananya Khanna, Advocate.
WITH + W.P.(C) 5424/2020 & CM APPL. 19579/2020 S.N. KAPOOR EXPORTS ..... Petitioner Through: Mr. Ajay Bhargava, Mr. Aseem Chaturvedi, Mr. Arvind Kumar Ray and Mr. Karan Gutpa, Advocates.
versus DIRECTORATE OF ENFORCEMENT ..... Respondent Through: Mr. Amit Mahajan, CGSC with Ms.
Ananya Khanna, Advocate.
Mr. Deepak Singh, Advocate for ICICI Bank.
WITH + W.P.(C) 5235/2020 & CM APPL. 18868/2020 M/S HAMILTON HOUSEWARES PVT. LTD. ..... Petitioner Through: Mr. Vijay Kumar Aggarwal, Mr. Mudit Jain, Mr. Talib Khan, Mr. Yugant Sharma Mr. Hardik Sharma, Mr. Parth Parashar & Mr. Shekhar Pathak, Advocates.
versus DIRECTORATE OF ENFORCEMENT ..... Respondent Through: Mr. Ravi Prakash, CGSC with Ms.
Shruti Shiv kumar and Mr. Varun Agarwal, Advocates.
WITH + W.P.(C) 5643/2020 & CM APPL. 20442/2020 SNB ENTERPRISES PVT. LTD. ..... Petitioner Through: Dr. Surat Singh & Mr. Shobhit Pratap Singh, Advocates.
versus DIRECTORATE OF ENFORCEMENT & ANR. ..... Respondents Through: Mr. Amit Mahajan, CGSC with Ms.
Ananya Khanna, Advocate.
WITH + W.P.(C) 5657/2020 & CM APPL. 20476/2020 ORBIT EXPORTS LTD. ..... Petitioner Through: Mr. Ajay Bhargava, Mr. Aseem Chaturvedi, Mr. Arvind Kumar Ray and Mr. Karan Gutpa, Advocates.
versus DIRECTORATE OF ENFORCEMENT ..... Respondent Through: Mr. Amit Mahajan, CGSC with Ms.
Ananya Khanna, Advocate.
WITH + W.P.(C) 5671/2020 & CM APPLs. 20522/2020, 5852/2021 SHANTIVIJAY JEWELS LTD. ..... Petitioner Through: Mr. Gaurav Nair and Ms. Pranati Bhatnagar, Advocates.(M:9810069969)
versus DIRECTORATE OF ENFORCEMENT ..... Respondent Through: Mr. Ravi Prakash, CGSC with Ms.
Shruti Shiv kumar and Mr. Varun Agarwal, Advocates.
WITH + W.P.(C) 5797/2020 & CM APPL. 20969/2020 MAXIS INDUSTRIES ..... Petitioner Through: Mr. Varun Singh, Advocate.
versus DIRECTORATE OF ENFORCEMENT & ANR. ..... Respondents Through: Mr. Manish Mohan, CGSC with Ms.
Manisha Saroha, Advocate for R-1.
Mr. Amit Mahajan, CGSC with Ms.
Ananya Khanna, Advocate.
WITH + W.P.(C) 7034/2020 & CM APPL. 23978/2020 M/S. BLOSSOM FABRICS LIMITED ..... Petitioner Through: Mr. Vivek Sharma, Advocate.
versus DIRECTORATE OF ENFORCEMENT ..... Respondent Through: Mr. Amit Mahajan, CGSC with Ms.
Ananya Khanna, Advocate.
WITH + W.P.(C) 7210/2020 & CM APPL. 24370/2020 PROMPT INTERNATIONAL ..... Petitioner Through: Mr. Ajay Bhargava, Mr. Aseem Chaturvedi, Mr. Arvind Kumar Ray and Mr. Karan Gutpa, Advocates.
versus DIRECTORATE OF ENFORCEMENT ..... Respondent Through: Mr. Ravi Prakash, CGSC with Ms.
Shruti Shiv kumar and Mr. Varun Agarwal, Advocates.
WITH + W.P.(C) 7801/2020 & CM APPL. 25677/2020 M/S MAYA TRADES ..... Petitioner Through: Mr. Gaurav Gupta and Mr. Samyak Gangwal, Advocates. (M:9958444233)
versus DIRECTORATE OF ENFORCEMENT ..... Respondent Through: Mr. Amit Mahajan, CGSC with Ms.
Ananya Khanna, Advocate.
WITH + W.P.(C) 7835/2020 & CM APPL. 25731/2020 EASTMAN INDUSTRIES LIMITED ..... Petitioner Through: Mr. Rahul Jain and Mr. Shubankar Jha, Advocates.
versus DIRECTORATE OF ENFORCEMENT NEW DELHI ... Respondent Through: Mr. Amit Mahajan, CGSC with Ms.
Ananya Khanna, Advocate.
WITH + W.P.(C) 9384/2020 & CM APPL. 30224/2020 M/S SUPRINT TEXTILES JAIPUR PVT LTD ..... Petitioner Through: None.
versus UNION OF INDIA & ANR. ..... Respondents Through: Mr. Ravi Prakash, CGSC with Ms.
Shruti Shivkumar and Mr. Varun Agarwal, Advocates.
Mr. Ajay Digpaul, CGSC and Mr.
Kamal R Digpaul, Advocate for UOI.
AND + W.P.(C) 9922/2021 M/S SUKU INNOVATIVES ..... Petitioner Through: Mr. Varun Singh, Advocate.
versus DIRECTORATE OF ENFORCEMENT & ANR. ..... Respondents Through: Mr. Ravi Prakash, CGSC with Ms.
Shruti Shiv kumar and Mr. Varun Agarwal, Advocates.
CORAM:
JUSTICE PRATHIBA M. SINGH
JUDGMENT
Prathiba M. Singh, J.
1. This judgment has been pronounced through video conferencing.
2. These are a batch of writ petitions filed under Article 226 of the Constitution of India, challenging freezing orders passed by the Directorate of Enforcement (hereinafter “ED”) wherein the bank accounts of the Petitioners were ordered to be frozen.
3. The genesis of these disputes is a communication dated 26th September 2018 received from the Office of the Prosecutor General, Rio De Janeiro, Brazil. The said communication was termed as a `Request for legal assistance’ in a criminal matter involving a former Governor of Brazil, Sergio Cabral, against whom allegations of corruption and money laundering were levelled. The diversion was assessed by the Brazilian Authorities to be more than a 100 Million Dollars. According to the Brazilian Authorities, a sophisticated system of compensation was indulged in by the former Governor. As per the said allegations, more than 3000 companies from 53 countries were stated to be involved. The specific allegation in respect of Indian companies was qua a sum of 13.24 Million Dollars. The Prosecutor General relied upon the United Nations Convention against Transnational Organized Crime, 2000, also known as the Palermo Convention, to make various requests to the Indian authorities in respect of the companies alleged to have been involved in money laundering in relation to the case against the former Brazilian Governor. The Prosecutor General from Brazil sought freezing/seizure of the bank accounts of the Companies stated to be involved, as also digital copies of all the documents relating to the identified bank accounts. A letter of Request was sent to the Indian ED by the Prosecutor General on 26th September 2018.
4. Pursuant to this Letter of Request, the ED passed freezing orders under Section 17(1A) of the Prevention of Money Laundering Act, 2002 (hereinafter, “Act”), in July 2020, freezing various bank accounts of the Petitioners and other companies in India, and also commenced proceedings under the Act against all the 66 companies.
5. The matter was referred by the ED to the Adjudicating Authority (hereinafter, “AA”) under section 17(4) the Act, pursuant to which, the AA issued notices to the Petitioner under Section 8(1) of the Act to show-cause as why their properties seized or frozen should not be retained as involved in Money Laundering under the Act. These notices were issued to the Petitioners in September 2020. The AA directed the Petitioners herein to file replies to the show cause notice, based on the ‘Relied Upon Documents’ (hereinafter, “RUDs”) that were supplied to them (Panchnamas). A hearing was then called for by the AA. During the hearings, as has been submitted by the Petitioners, each of them were afforded a mere 2-3 minutes to make their oral submissions before the AA. The fact that the hearings were so brief is not disputed by the Respondents.
6. In the meanwhile, the present writ petitions were filed before this Court praying to quash and set-aside the freezing orders passed by the ED, against these Petitioners’. The stand of the ED supporting the said freezing orders has been that they executed the freezing orders under Section 17(1A) of the PMLA, in accordance with the mandate of Section 60(6) of the PMLA, on the basis of the Letter of Request received from the Government of Brazil.
7. The Petitioners at the interim stage, contended that the request, if any, ought to be, only qua the particular amounts and the carte blanche freezing of the bank accounts in their entirety was not warranted, when the dispute was pending before the AA.
8. Thereafter, interim orders were passed in all these petitions directing the Petitioners to secure the amounts qua which the allegations of money laundering pertained, in a fixed deposit/ bank guarantee or by depositing the said amounts in their bank accounts in question at all times. The order of the ED, freezing the bank accounts were stayed, su
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
